The decision to purchase a business is a significant undertaking and should be made in light of complete information regarding the target company. This includes various financial aspects, intellectual property and various other legal considerations. Having this information is essential in formulating and negotiating the terms of buying a business in Maryland or any other state.
When inspecting the target company's finances, the buyer will need to gather all of the historical financial statements for the business as well as other relevant financial documents and records. The company's annual, quarterly and monthly statements for the previous three years will be key in analyzing the company's growth trajectory and its overall financial health. The target company should ideally have enough working capital to continue operating the business.
The target company may also own some intellectual property and patented technologies which are an important consideration when negotiating the purchase of the business. The company may have even already granted licensing of patented technology to third parties. This can have an effect on the valuation of the patent as well as the valuation of the company as a whole.
After the terms of the transaction are agreed upon, it will still be necessary to ensure that the transaction complies with applicable laws and regulations, both at the federal level and in Maryland. This will include filing the correct legal paperwork and documents with the appropriate regulating agencies. Requirements for compliance will vary buying a business, and much will depend upon the industry as well as a variety of other factors specific to the contemplated purchase.
Source: Forbes, "20 Key Due Diligence Activities In A Merger And Acquisition Transaction", Richard D. Harroch and David A. Lipkin, Dec. 19, 2014